coindesk.com
The crypto market was mixed before the Federal Reserve’s interest-rate decision later Wednesday. The CoinDesk 20 Index has added 0.41% since midnight UTC, with 10 members advancing and 10 declining.
Bitcoin $BTC$64,491.67, the largest cryptocurrency, added 0.75% to claw back some of Tuesday's losses after a volatile 48 hours that saw it spike to $66,700 last week before crashing to $62,400 in the wake of the rout in South Korean stocks.
Inflation running at 4.1% makes the case for the Fed to raise the fed funds target rate for the first time in three years. Balanced against that, a pause in Iran-U.S. hostilities has taken some of the heat out of oil prices and slightly trimmed the odds of an increase.
Ether ($ETH) is down 0.13% on the day. S&P 500 and Nasdaq 100 index futures are both positive, while gold holds above $4,000 and silver gained 1.40%, suggesting markets are hedging rather than committing ahead of the announcement.
Derivatives positioning
- Steady positioning ahead of Fed meeting: The crypto taker long-short volume ratio is almost in a perfect balance ahead of the Fed meeting. Open interest (OI) has held steady near $113 billion over the past 24 hours while volume increased by 10% to $205 billion. Taken together, the numbers point to steady positioning but slightly higher churn.
- Spot gains yet to lift futures participation: Both $BTC and $ETH’s spot prices have risen more than 1% in 24 hours, but the moves have yet to translate into increased participation in futures. $BTC’s OI remains steady near 750K $BTC. $ETH’s dropped for a fourth straight day to 14.14 million $ETH.
- $UNI is an exception: Most of the top-20 tokens have seen OI hold steady or fall over 24 hours. $UNI is an exception, with OI up slightly to 68.53 million tokens, the most since July 13. This validates the 5% upswing in the token’s price in the wake of BlackRock’s decision to bring its tokenized Treasury fund to the decentralized exchange.
- Mixed signals from OI-adjusted CVD: The 24-hour OI-adjusted CVD paints a mixed picture. It’s positive for tokens such as $ADA, TRX, $XRP, CC, $UNI and $ETH, a sign of more and more traders going long at market orders rather than passive limit orders. Other coins display the opposite dynamic.
- Implied volatility stays near recent lows: Bitcoin and ether’s 30-day implied volatility indexes remain near recent lows, a sign that traders do not expect any near-term jitters. It also contradicts the unease in the analyst community over the fact that traders still assign a 35% probability of the Fed raising rates on Wednesday. This is unusual as markets typically reach a consensus on what the Fed will do before the decision.
- Puts dominate $BTC options volume: In Deribit-listed options, $BTC puts at strikes $62,000, $60,000 and $54,000 dominate the 24-hour volume rankings. A put option offers insurance against price drops in the underlying asset. In $ETH’s case, calls are at the top of the list.
Token talk
- $XRP led altcoin gains on Wednesday, rising 1.72% to $1.086, with $ADA$0.1635 rising 1.48%. Both are continuing to recover from their July lows as the major cryptocurrencies consolidate.
- Jupiter (JUP) was the standout 24-hour performer among DeFi coins, rising 5.79% as trading volume ticked up, extending a recovery that has now seen it rise in three of the past four days.
- FET continued its retreat, falling 4.60% since midnight and 6.78% over 24 hours. The AI token is now down nearly 14% over the past week as the sector's early-July momentum continues to unwind.
- PUMP$0.001868 shed 5.14%, giving back the bulk of last week's speculative gains as retail enthusiasm fades.
- Monero (XMR) bucked the trend with a 1.82% gain to $347, quietly extending a run of outperformance from the privacy coin sector that has gone largely unnoticed amid the broader market turbulence.